Birla will invest up to Rs 300 crore in his personal capacity in Applause Entertainment in the first year of its operations to make 15-20 showsMegha Mandavia&Baiju Kalesh | ET Bureau | August 17, 2017, 11:09 IST

Aditya Birla group chairman Kumar Mangalam Birla has hired Sameer Nair, the former group chief executive of Balaji Telefilms, to revive its defunct unit Applause Entertainment to make “binge-worthy” entertainment content for telecom operators and digital platforms such as Netflix, Amazon and Hotstar. The move will position Applause to take advantage of the cord-cutting trend — audiences shifting to video streaming on phones and other devices from broadcast television.

Birla will invest up to Rs 300 crore in his personal capacity in Applause Entertainment in the first year of its operations to make 15-20 shows across the drama, romance, crime and thriller genres. It may also occasionally produce movies. The content studio will make shows in Hindi, Tamil and Telugu to start with and then move to other languages.

“We plan to reignite Applause Entertainment to invest in the creation and distribution of content in film, television and digital for new audiences and new markets,’’ Birla told ET. “I am excited with the possibilities and opportunities that beckon as the telecom, media and entertainment worlds collide and converge.”

India is witnessing an increase in content consumption on mobile phones via over-the-top (OTT) platforms such as Hotstar, Netflix and Amazon Prime video on the back of an improvement in broadband speeds, lower 4G internet tariffs and cheaper smartphones.

Apart from OTT platforms, telecom companies such as Reliance Jio Infocomm and Bharti Airtel have their own streaming services. “There is this whole segment of audience today which is lapsing from television,” Nair said.

“They have 4G data and broadband connections, and are willing to spend money on entertainment… There is huge demand for original content in Indian languages. Video streaming platforms can’t just rely on non-exclusive content like movies or TV shows. They need addictive content to make audience binge-watch it.”

Amazon has allocated nearly Rs 2,000 crore for content creation in India, according to industry sources, higher than the annual programming budgets of the top three Hindi general entertainment channels put together. Netflix has signed a multifilm deal with Bollywood star Shah Rukh Khan’s production company Red Chillies Entertainment, giving it access to the banner’s back catalogue and exclusive streaming access to future releases over the next three years. Eros Now has collaborated with phone companies Vodafone India and Jio to integrate its offering on their platforms.

“In the last 20 years, broadcast has been dominated by daily soap operas. They killed off all the other formats of storytelling. It is catering to the lowest common denominator. We completely missed out on the premium subscription model that is prevalent in the US,” said Nair. “The video streaming market is nascent today and content is playing catch up.”

OTT players largely follow the freemium model, which means most of the content is free and some premium content is charged.

Netflix bucked the trend in India and introduced a subscriptiononly model in January last year. To convert audiences to subscribers, OTT players need original and exclusive content.

“There has certainly been large spending on content creation. While there exist libraries of Indian content of TV shows and films, there is a lot of space available to create digital content specifically for OTT players.

Original content is the hook to attract and convert paid subscribers,” said Jehil Thakkar, partner at Deloitte. “As India is predominantly mobile, our content has to be created for individuals than groups.”

Birla had shut Applause Entertainment, best known for producing the 2005 Hindi movie Black starring Amitabh Bachchan, in 2009 after it struggled to turn a profit.

He rose to become CEO of Star TV in 2006 and was instrumental in launching money spinner quiz show Kaun Banega Crorepati with Bachchan as the quiz master among programming.

“The long and short of this is that the driver for next decade is data and video drives data. In video, binge-worthy addictive video is the driver,” Nair said. “Data consumption is not doing to be driven by YouTube videos or live streaming.”